AI Provides ‘Zero Payoff’ to S&P 493 Outside Tech, Apollo Economist Says

AI adoption is not yet a driver of broad economic gains, despite company spending.

AI investments have yielded no financial returns for companies in the S&P 493 index outside the technology sector, according to Apollo Global Management Inc. The firm's chief economist, Torsten Sløk, observed that while the tech industry has seen significant capital expenditure on AI, the broader market has not experienced a corresponding increase in productivity or profitability attributed to this technology. This suggests that the economic benefits of AI, at least in the short to medium term, are concentrated within a small segment of the market, leaving the majority of businesses without a demonstrable return on their AI-related expenditures.

The observation that AI offers "zero payoff" outside of tech implies that AI's current economic impact is highly concentrated. This could mean that the infrastructure, talent, and specific applications required for AI to generate tangible returns are predominantly found or are most effective within the technology sector itself. For non-tech companies, the challenge might lie in integrating AI into existing workflows, the lack of specialized personnel, or the immaturity of AI solutions tailored to their specific industries.

This situation raises questions about the future investment strategies for AI across all sectors. It suggests that companies outside of tech may need to reassess their AI adoption plans, focusing on more targeted applications or waiting for the technology to mature further before expecting significant returns. Investors might also need to calibrate their expectations regarding AI's immediate impact on the broader market's financial performance, looking for evidence of productivity gains beyond the tech giants.